New VAT Law Impacts Developers

by Developer.com Staff

Developers who sell apps or games in Europe without going through Google Play or the App Store need to collect tax and retain records.

On January 1, 2015, a new valued added tax (VAT) targeted at digital goods went into effect in Europe. The new law applies to everyone who sells digital goods (like apps or games) in Europe, not just those physically located in the region.

"Businesses that sell digital goods will be required to register for VAT in the countries where their products are purchased by customers," explains the App Developers Alliance. "However, the new requirements don't end there. They will also need to record the exact location of their product sales and keep those records on file for 10 years."

Google Play and Apple's App Store are handling the new VAT requirements for their developers. However, developers selling their wares in other ways need to be aware of the new law and how it impacts them. The App Developers Alliance has an FAQ page that offers a good overview of the complicated law.